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99 Foreign Aff. 84 (2020)
The Pandemic Depression: The Global Economy Will Never Be the Same

handle is hein.journals/fora99 and id is 914 raw text is: 

The Pandemic Depression

The Global Economy Will Never Be
the   Same

Carmen Reinhart and Vincent Reinhart

The covD-19 pandemic poses a once-in-a-generation threat to

       the world's population. Although this is not the first disease
       outbreak to spread around the globe, it is the first one that
governments have so fiercely combated. Mitigation efforts-includ-
ing lockdowns and travel bans-have attempted to slow the rate of
infections to conserve available medical resources. To fund these and
other public health measures, governments around the world have
deployed economic firepower on a scale rarely seen before.
  Although  dubbed a global financial crisis, the downturn that be-
gan in 2008 was largely a banking crisis in 11 advanced economies.
Supported by double-digit growth in China, high commodity prices,
and lean balance sheets, emerging markets proved quite resilient to
the turmoil of the last global crisis. The current economic slowdown
is different. The shared nature of this shock-the novel coronavirus
does not respect national borders-has put a larger proportion of the
global community in recession than at any other time since the Great
Depression. As a result, the recovery will not be as robust or rapid as
the downturn. And ultimately, the fiscal and monetary policies used
to combat the contraction will mitigate, rather than eliminate, the
economic losses, leaving an extended stretch of time before the global
economy  claws back to where it was at the start of 2020.
  The  pandemic has created a massive economic contraction that will
be followed by a financial crisis in many parts of the globe, as nonper-
forming corporate loans accumulate alongside bankruptcies. Sover-
CARMEN REINHART is Minos A. Zombanakis Professor of the International Financial
System at the Harvard Kennedy School. Subsequent to the completion of this article, she
was named Chief Economist at the World Bank.
VINCENT REINHART is Chief Economist and Macro Strategist at Mellon.


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